Two alliances this month between providers of counterparty data and suppliers of data management systems indicate that counterparty data’s role in the bigger enterprise data management (EDM) picture continues to mature and more closely resemble that of security master data.
As Reference Data Review went to press, Standard & Poor’s and Siperian (which already has relationships with both Avox and CounterpartyLink in the entity data space) announced a tie-up under which S&P’s Security to Entity CrossWalk (an alliance between S&P, D&B and Telekurs Financial) will be added to the Siperian master data management platform MDM Hub. Meanwhile, EDM vendor GoldenSource and Avox have also entered into a strategic alliance, under which, they say, the Avox business entity data service can be easily integrated with the GoldenSource EDM platform.
Gert Raeves, vice president, business services at GoldenSource, says the integration with Avox differs from its typical model of data vendor integration for security master data, where there are “de facto vendor standards”, and where all the integration is done and maintained by GoldenSource. “As well as the big four or five vendors of security master data, there are anything between 20 and 50 smaller, more niche providers,” he says. “The extent to which we can cover all of the datasets of a particular feed and offer a proactive support model is a key differentiator for us on the instrument data side.” On the entity data side, by contrast, there is currently no such thing as “the source” of data, he suggests. “Different providers cover different chunks, such as legal entity data, credit information, standing settlement instructions et cetera, but there really isn’t a shortlist of the big four or five vendors to which we must be connected, and that is reflected in our strategy around these types of connection.”
As a consequence, in the case of Avox, the “logic of the integration is reversed”, Raeves explains. “Avox has mapped its data feed format to a GoldenSource database structure. This is about a data vendor in a less commoditised market being very flexible about how it delivers its data. What the development makes available is very close to a plug and play infrastructure. The end result is the same – less integration for joint customers – but in this case the integration and mapping effort have been done proactively by the data vendor.”
Though the approach may have been slightly different, the Avox integration is strategically important for GoldenSource, Raeves adds. “As we position ourselves as an EDM provider, rather than a provider of just a security master solution, we have to be able to accommodate data from Avox, CounterpartyLink, D&B et cetera,” he says. “We have existing implementations with D&B and CounterpartyLink, and Avox is now in that same category, for which plug and play connectivity is in place.” While there are no clients currently taking advantage of the integration, “it is more than theoretical”, he continues: “The mapping is done and validated and tested. So the integration is speculative, but at the same time many conversations are happening with clients on both sides.”
Ken Price, Avox CEO, confirms that the two vendors have mutual clients and says: “We are now beginning talks to deliver our integrated solution with them and others.” Describing the motivation for this integration from the Avox side, Price adds: “Goldensource has a large and satisfied client base for their security master product. We believe that there is a natural technology evolution for them into the client/counterparty space. Mapping to their format will enable GoldenSource clients to quickly tap into the Avox data pool. This helps Avox get access to more clients, GoldenSource can more rapidly expand into the business entity database market and our mutual clients get better data quality in a robust technology platform.”
Part of what a platform like GoldenSource’s can bring to the table in the entity data space is the linkages between data that are so important for use in areas such as compliance, and increasingly these linkages are starting to be provided within data feeds by the data vendors. Raeves accepts there could be some overlap here. “Feeds like CrossWalk, RED and Avox are starting to combine issue and issuer/product and financial institution information in the feed. We can also facilitate that linkage by bringing together different sources,” he says.
However he suggests this is more of an “and/and” scenario than a question of “and/or”. “There are quality considerations when looking at different data sources,” he says. “They may offer a cross-reference, but is it complete enough, is it deep enough for your client onboarding process, for example? There is still often a need to modify the data you get from a data vendor.”
Indeed, it is in the area of linkages to create comprehensive client and counterparty data that EDM platforms come into their own on the entity data side, Raeves believes. “Entity data is classified into different buckets – legal information, credit data, risk data and operational data – such as payment and settlement instructions,” he says. “With the emergence of platforms like GoldenSource, it is possible to link together different types of information for each entity from different sources – for example Avox and Omgeo Alert. Though there isn’t a single source of all entity data, the golden copy logic for security master data can be applied to legal entity data, less for comparing different sources of the same data, and more for the intelligent linking of different data items, so bringing the SSI into the corporate hierarchy, for example.”